Shareholders of Irish drug maker, Elan, approved a US$1 billion or GBP651 million share buyback approval. With the approval, it would avoid the takeover bid from US investment firm Royalty Pharma.
The buyback offer is priced per share at US$11.25 and US$13.00 and a shareholder vote of 99.2% at a special meeting approved the programme. This is but one of the plans to return to its investors cash it had earned after US$3.2 billion sale of Elan's interests over Tysabri, the multiple sclerosis drug.
For its part, Royalty Pharma exercised its right to reduce its initial bid offer of US$11 per share if the buyback pushes through. The private equity firm can also opt to improve its offer if Tysabri obtains milestones, as Elan receives royalties for the sale. This was confirmed by anonymous sources who told Reuters.
Elan had previously rejected the Royalty Pharma proposal as it was 'highly conditional indication of interest' and the firm hopes to restructure itself into a relevant company after it sale of Tysabri leaves it only with one drug possibility in its portfolio.
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